Amazon Web Services To Launch Big Data Analytics Service

Amazon.com Inc. ’s cloud-computing division, Amazon Web Services, will wade into a hotly contested new territory this week when the company is expected to announce a new service to help businesses analyze their data, according to people familiar with the matter.

Many companies already store proprietary data on AWS, which counts Netflix Inc., Airbnb Inc., Nike Inc. and Pfizer Inc. among its clients. That puts Amazon in a strong position to offer an add-on service, said Boris Evelson, an analyst at Forrester Research Inc. “This will be the new 800-pound gorilla in the [business intelligence] market,” he said, a market expected to be worth $143 billion in 2016, according to analyst Pringle & Co.

Amazon declined to comment.

Code named Space Needle, the new analytics service could help Amazon lock in AWS customers more tightly by housing more of their data on the platform. It would also broaden the cloud-computing division’s target users, typically information-technology workers, to include nontechnical employees, such as business managers.

The service is expected to include a faster method for transferring or copying data to AWS. In cases where the amount of data to be moved would take a prohibitive amount of time to move over the Internet, Amazon would supply a storage device that customers could send back filled with data. The Seattle-based company expects to charge a monthly subscription fee.

Space Needle is only the latest of dozens of business-intelligence programs that have sprung up to deliver on the promise of big data. It would compete with business intelligence software from giants, including SAP, IBM, Microsoft and Tibco Software Inc., as well as newer players, such as Tableau Software Inc. and Microstrategy Inc., and startups, such as Birst Inc. and Domo.

Amazon’s prospects are bolstered by the immaturity of the data analytics market, Forrester’s Mr. Evelson said. Spreadsheets are used for half of all business reporting, and only 40% of the available data typically is tapped for decision making, he said. Despite fierce competition, many enterprises are disappointed by current offerings, he said.

Corporate data has proliferated as computers play a larger role in operations, more business is conducted online, and the cost of data storage has fallen. The data explosion promises to illuminate business decisions, boosting efficiency and agility. People who are trained to understand how to manage information and derive insights from it, known as data scientists, are highly sought after and highly paid.

For instance, a financial executive may want to find the relationships between meetings with customers and sales in various regions. In this case, business intelligence software would draw on databases of sales transactions, logs of customer meetings and other information to visualize the relationships in graphic form. It may also offer an opportunity to test the results of different scenarios by adjusting sales figures or the number of meetings held in various regions, making it easy for the user to see how to allocate resources for maximum revenue.

However, such software requires access to relevant data sources, which may not be easy to tap. Data is often stored in disparate repositories, in inconsistent formats, or arriving in a real-time stream from sensors embedded in products or equipment. Connecting different databases can be difficult, and integrating them with data held in long-term storage poses further challenges.

Tools like Space Needle can be only as good as the data fed into them, and the long-term question is how AWS will connect to data that isn’t stored in AWS systems.